Credit Card Acceptance Boosts Cab Revenue in NYC

Despite recent concerns from convenience store clerks and other retailers about the rising cost of accepting credit cards, a new group of merchants reports major success with a move from cash to plastic. New York City cab drivers, in a recent New York Times Magazine profile, revealed that credit card acceptance in taxis can boost revenues by as much as 13 percent. Credit card holders tip more generously, too, with survey results showing a 22 percent average increase on gratuities compared with cash-paying riders.

Critics of high interchange fees claim that the Times' numbers have been skewed by former riders of private car services who have switched to less expensive cab rides during a tight economy. Merchant acceptance proponents counter that claim with the suggestion that many of those previous sedan riders switched to cabs specifically because they can use corporate credit cards to pay fares that might not have been reimbursed if paid with cash. All sides agree that more American consumers expect access to credit card terminals in cabs, corner stores, and other venues once dominated by "cash only" signs.